Adventures in Legal Outsourcing to India and Beyond

June 03, 2011

Indian LPOs Hiring Hundreds of U.S. Lawyers, and Indians Are Training Them

In news that may come as a surprise to those who believe offshore legal outsourcing is nothing but a vehicle for the loss of American jobs, it turns out that most of the largest LPOs are hiring hundreds of US lawyers, and they are doing so in the US. As The New York Times reported yesterday, leading offshore legal process outsourcing companies such as Pangea3, Integreon, and UnitedLex all have established significant US operations, which, if they were law firms, would be considered large firms.

For example, Mumbai-based Pangea3, having had operations in New York for years, now has set up a 400-seat facility in Carrollton, Texas. Integreon already has 500 employees in Fargo, North Dakota and elsewhere in the US, with expectations of hiring another 100 this year. For its part, UnitedLex, with 240 employees in the US already, is expanding to a 24,000-square-foot building in Overland, Kansas, so that it can expand its American operations even further. The New York Times reports that "[al]though the industry’s total number of employees in the United States is still estimated to be only in the hundreds, analysts predict fast growth for the field."

In another twist, Indians are training Americans. For example:

In April, Pangea3 sent Kirit Amichandwala, a senior manager from Mumbai, to train new employees in Texas on how to conduct document reviews and other tasks the way the company’s lawyers do in India. The new hires “all have good document review experience,” Mr. Amichandwala said, “but a lot of the processes we follow are pretty unique to us.”

One of Pangea3’s main competitors, UnitedLex, has started regularly swapping teams of lawyers between the United States and India so that employees in both countries can learn to work the same way.

The big challenge is “how do you get a bunch of American lawyers to believe that we might be doing things smarter” by using a process developed in India, said Shelly Dalrymple, senior vice president for global litigation support at UnitedLex.

One American law firm was so won over that it asked a UnitedLex document review manager from India to train its own team in Boston, Ms. Dalrymple said.

US lawyers and law firms who miss the old days, when clients would pay several hundred dollars per hour for armies of inexperienced young associates to pore through millions of pages of dreary discovery and due diligence documents, will continue to complain that legal outsourcing is depriving the economy of high-paying jobs. They strenuously will continue to object to the "commodification" of legal work. And they will complain and that "American salaries for outsourced work, typically in the $50,000 to $80,000 range," are "meager compared with the six figures that new associates might still hope to draw at a big firm."

But the old days are gone, and the old ways never made sense in the first place. No sophisticated client these days will pay hundreds of dollars an hour to a law firm for document coding that can be done by most English-speaking high school graduates after a couple of weeks of training.

Indeed, it is a mystery why some clients apparently are willing to fund even $50,000 to $80,000 in US salaries, plus US overhead costs, for such work. In India, thousands of attorneys at legal "document factories" are eager to provide the same services for a small fraction of the salary and cost, even on night shifts if needed. The work itself is not attractive, to say the least. But in India, it usually beats toiling in the sclerotic Indian legal system, in which court cases can take as long as a quarter of a century to be resolved, and where Indian "advocates" can earn as little as the rupee equivalent of $100 per month, or less, as their starting salary, if they receive any salary at all.

In any event, legal outsourcing, whether offshore, onshore, or nearshore, is not depriving American lawyers of high-paid document review jobs. Those jobs don't exist anymore. They aren't coming back, nor should they. They disappeared, not because of India or LPOs, but because those jobs never made sense. If LPO companies did not solve the problem, someone else would have done it, whether through the expansion of in-house legal departments, or creation of the kind of internal caste system that big law firms now are rushing toward. It is true that offshore legal outsourcing is likely to shake up the law world, but in other ways. For more on that, see the conveniently titled, previous post, "12 Ways Legal Outsourcing Could Shake Up the Law World in the Next Decade."

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